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Tuesday, November 17, 2009

Should a certain percentage ownership be required to serve on a community's board?

The common interest ownership statutes do NOT require a director to be an owner in the community. Whether or not ownership is a prerequisite to serving on the board depends entirely on what a particular association's governing documents say.

Most documents do state that only association members are entitled to run for the board and membership is based on ownership of property in the community. Some documents, however, have throwback language to when the developer was still in control and thus, do not specify that only owners can run for the board. In these communities, anyone who is interested can run for the board. This means the landscaper, the association manager, renters or someone's cousin who lives one county over can run for the board and serve, if the community votes them in.

Of the communities that do require that directors be owners in order to serve on the board, the vast majority do NOT specify a minimum percentage of ownership to qualify. In today's crazy real estate market there are a lot of quit claim deeds flying around. Some people are purchasing or being given, for a variety of reasons, very small percentages in residential property. This begs the question: does a 1% owner have enough of a vested interest in the property and the community to want to serve on the board?

How many of you feel that this issue should be addressed legislatively in March when our 2010 Session commences? Should a minimum percentage ownership be required in order to be eligible to serve on one's board? Should ownership at all be mandated since currently it is not?

If you can't live with the thought of non-owners serving on your board, this is one more item you will want to look at in the documents before you buy!

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